Israel’s Vision For The Future: Investors Open Eyes To Ophthalmology

As the global population ages, the demand for #ophthalmicDevices is expected to rise significantly.

#Medtech Insight meets with some of Israel’s industry leaders who are developing cutting edge technologies to address the ever growing ophthalmic market.

When serial entrepreneur Barak Azmon started his first #ophthalmic technology company in 2000, it was one of just a few medical device companies in Israel occupying the space. Now, nearly two decades later, he says the ophthalmology sector in the country has grown to encompass more than 60 companies.

“We’ve seen a wave of innovation in ophthalmology, and the whole field in Israel has grown in size and also expanded,” Azmon told Medtech Insight. “There are now companies not only in ophthalmic devices, but in vision care, diagnostics and surgery equipment, as well as pharma companies.”

And it’s not only Israel that is seeing a boom. The global ophthalmology market is witnessing significant growth due to the increasing incidence and prevalence of eye-related disorders among the aging population. Age-related macular degeneration (AMD), diabetic #retinopathy, and glaucoma present some of the largest market opportunities for companies.

“What we have seen in the last few years is a big change in the area of pharmaceuticals. Historically, Israel did not have many start-ups in ophthalmic pharma, but there’s been a big change in ophthalmology investment. Many of the American venture funds totally transformed from being medical device-focused to pharma-focused because there’s much more money in pharma,” Notal Vision’s Barak Azmon says.

Azmon cofounded Notal Vision with business partner Yair Alster to address AMD after practicing for years as an ophthalmologist. The pair developed Forsee Home – an at-home monitoring device for early detection of wet AMD, the most common late form of dry AMD, which occurs when abnormal blood vessels grow underneath the retina. These unhealthy vessels leak blood and fluid, which can prevent the retina from functioning. Early detection is critical to catch progression and maximize treatment efficacy.

Notal’s device uses a three-minute daily test that consists of a series of dotted lines appearing on the screen of the device. Using a mouse that comes with the device, users click repeatedly on the “bumps” or “waves” that appear on the lines. The device then captures the user’s responses, and test results are automatically sent to Notal’s data monitoring center for analysis. If test results indicate potential AMD progression, then the physician’s office is alerted. The system is FDA-cleared and currently available in the US.

Azmon stepped down from his role in Notal’s management team in 2016 but continues to serve on the company board. He is now developing a range of ophthalmic technologies and involved in several early-stage companies.

“The biggest market that companies are looking at are the diseases of the retina – retinopathy and AMD,” Azmon explained. “AMD is the leading cause of blindness in the elderly in the western world and represents a slightly bigger market than diabetic retinopathy because of the aging population. Right now, 30% of people over 80 have some kind of AMD; however, diabetes is also becoming a plague.”

Innovation is also taking place to develop the next generation of intraocular lenses (IOLs) to improve vision for patients who undergo cataract surgery. “The new generation of IOLs we are trying to develop will be able to mimic a natural, healthy lens,” says Azmon. “We hope we can give people the ability to see like when they were young again.”

Both pharma and medical devices in Israel are also interested in treating dry-eye syndrome (DES), which is the No. 1 reason people visit an ophthalmologist. This common condition occurs when eyes do not produce enough tears, or the tears evaporate too quickly. This can lead to the eyes drying out and becoming red, swollen and irritated.

Israeli laser company Lumenis was the first company to develop an FDA-approved Intense Pulsed Light (IPL) treatment for dry-eye in the late 1990s, which uses bursts of light directed at the lower eyelids and upper cheek areas. The light heats the eyelid glands that are blocked with stagnant secretions. The physician is then able to manually express the stagnant material from the eyelids. Researchers and clinicians are now looking to develop new innovative treatment options and shake up the market.

Pharma Companies Pick Up Pace

For Azmon, his next big venture is to establish Israel’s first venture capital fund dedicated solely to supporting ophthalmic companies. He says over the years there’s been a major shift toward pharma investment over medical devices.

“What we have seen in the last few years is a big change in the area of pharmaceuticals. Historically, Israel did not have many start-ups in ophthalmic pharma, but there’s been a big change in ophthalmology investment. Many of the American venture funds totally transformed from being medical device-focused to pharma-focused because there’s much more money in pharma,” he said.

“At the beginning we didn’t have good management in Israel and had less experience in the drug industry, and universities were more academic and less industry-orientated. But as the space grew and people saw that there’s money to start things, we started to get more development in the pharma space, which usually means more money. More and more investors both strategic and financial are looking at Israeli technologies. Mainly from the US and Israel, but we definitely see the US side is growing.”

Nevertheless, Azmon believes there’s still huge potential in the ophthalmic device technologies, with Asia presenting a significant opportunity for innovative companies. “Another market we are looking at is myopia. In the East, for example, it depends where you look, but around 70%-80% of the people [in that region] are myopic, so there’s a lot of research now on how to start treating myopia when kids are small. So we will see more innovation in the near future in devices and also probably drugs for that indication.”

He said Israeli companies are also strengthening ties with Australia, which launched a major initiative to encourage innovation in health care. Companies are eligible to receive 45% of their R&D expenses back in cash. “We actually moved one of our companies we started in Israel to Australia. Although Australia is a schlep, it has a very favorable environment for clinical trials. There’s very easy regulation which can be efficient for research because there are no animal trials, so you skip millions of dollars’ worth of research. There are also a few nice venture funds that are doing very well and are willing to invest, which is helping to build a small industry there.”

Israel is also working with China to help develop its own incubator system in the south of China. “Right now what the Chinese are calling an ‘incubator’ is usually a real-estate business, but we are trying to help them to build IP incubators with the expertise to really grow businesses. The project is in its infancy, but it will grow because we can see in China an eagerness and a desire to change the world, and they’re a people on a mission.”

Incubation A Driving Force

Israel’s #incubator program has been the driving force in shaping the innovation landscape in the country over the years. “The hi-tech culture here is very interesting and continues to grow. Twenty years ago, Israel had almost no tech companies and health care grew up slowly on the side, but it became a much bigger industry and started a lot with the incubator program,” says Azmon.

“I think the reason Israeli companies like ophthalmology is because it matches the Israeli kind of psyche – we like to be able to visualize and see things. We also had some successes in the field –partnerships from the US and sold a few companies, which fuels the next wave of companies. Our connections with the world industry are becoming tighter, so we hope to see more big companies investing.”

This year, Azmon will chair the ophthalmology track at Israel’s annual life-science conference, MiXiii BIOMED*. The conference aims to explore the innovations and trends that are shaping the future of health-care systems, and create opportunities for collaboration and partnering.

“There are two things we want to achieve at BIOMED – firstly, we want to strengthen ties with strategic companies because at the end of the day that’s where we’re aiming for, but we also want to understand the market too,” says Azmon. “We are getting more investment from industry than we did 15 years ago, but I still see a big difference between companies in the US and Israel in their ability to communicate with the big strategic companies. The US companies have a big advantage because we are far way, a different culture, different language. Also, our understanding of what strategic partners are looking for or where the future/innovation is going can be more difficult for us.”

EyeYon – Curing Corneal Edema

Israeli company EyeYon Medical is developing a #noninvasiveSolution for the #prevention and #treatment of corneal #edema. A common but painful condition, corneal edema occurs when the thin, transparent film of the eye becomes edematous, often as a result of infection, ocular surgery trauma, swelling and aging.

Founded by ophthalmologists Arie Marcovich, Daphne Ofer and Nahum Ferera – who serves as EyeYon’s CEO – the company’s first product, Hyper-CL, is a therapeutic, two-week disposable contact lens that relieves pain from corneal swelling by extracting fluids through osmosis from the cornea, thereby smoothing its surface. The product is CE-marked and US FDA-cleared.

Ferera told Medtech Insight the company’s next big focus is developing an implant to cure corneal edema completely. EndoArt is an artificial endothelial layer that uses an implant made of silicon film attached to the posterior corneal surface to prevent creation of edema in the eye.

The product is currently in clinical stage but has demonstrated promising results in human and animal trials. Last year, the company received a $6.5m cash injection from China-based venture capital fund Rimonci Capital and co-investor Gauss Group.

“Our goal is to reach Asia and China is an important market for EyeYon, as more than 4 million in China people suffer from corneal blindness and can benefit from EyeYon’s technologies,” said Ferera.

NanoRetina – Restoring Vision To The #Blind

Restoring vision to the blind is the ambitious goal of #NanoRetina, a portfolio company of investment house and innovation hub Rainbow #Medical. Founded in 2009 by veteran inventor Yossi Gross and Jim von Her, founder and CEO of Zyvex Labs, the company believes it has developed the most advanced artificial retina in the world today. The device is a miniature implantable chip designed to replace the functionality of damaged #photoreceptor cells. “Our goal is to restore vision to blind people,” NanoRetina’s CEO Yaakov Milstain told Medtech Insight.

Inserted into the retina in a 30-minute procedure, the miniature Nano Retina NR600 implant turns into an artificial retina that melds to the neurons in the eye. It is activated by the wearer using special eyeglasses that transforms natural light into electrical impulses that create the stimulation required to activate the remaining healthy retinal cells.

“The implant itself is basically like a satellite, it has two photovoltaic cells that get the infrared light and convert it into electricity. It then has a chip that is a digital camera and a processor that takes this image and transfers it into electrical impulses, and these pulses are sent to the retina through these electrodes that are at the back of the implant,” explained Milstain.

There are currently three other companies in the race to develop an artificial retina – Pixium, Retinal Implant and Second Sight – but Gross believes the resolution produced by NanoRetina’s chip is the best out there. “We have better resolution than any other companies out there developing these types of technologies. Many of them have had issues and been pulled from the market. They also require a very long and difficult surgery procedure compared to ours. A short surgery time is important when you go to an older population, as they need a procedure that is less stressful,” he said.

So far, the company has raised $27m in funds but is looking for more as it gears up for its first in human study. “We have finished developing the prototype; everything is working and we have approval to do the clinical study in Europe, so we’re going to start the study in the next few months,” said Milstain.

The European study will cover 20 patients – starting in Belgium – which the company expects to bring them to CE mark by the end of 2018, with a view of going to the market by 2020. In 2019 the company will also start the FDA process to take the device to the US market.

NANORETINA’S MINIATURE IMPLANTABLE CHIP

OrCam – Reading The World

Jerusalem-based company OrCam decided to take a different approach. Established in 2010, the idea behind the company was to harness image processing and computer vision to assist the visually impaired.

“Our first decision was to not try to restore vision but to explain the information you can’t see. The goal is to give you information that is actionable so you can work, study, be functional and independent,” Yontan Wexler, OrCam’s executive VP of R&D, told Medtech Insight.

“We approached blind people, and did many focus groups and studies to determine what are the needs for visually impaired people,” explains Rami Ben-Yehuda, VP at OrCcam. “Reading was the No. 1 use we found, so having the ability to read printed text from smartphones, laptops, newspapers, street signs or anything that is printed. The second thing was socializing – so being able to recognize people and have familiarity in surroundings.”

The company’s device, OrCam MyEye, is a wearable platform designed to address these needs. The device consists of a tiny camera and microphone that attaches to a pair of glasses and is linked to a processing base unit that uses machine learning and deep-learning techniques to provide assisted vision. By pointing a finger at a text, the user triggers the text-recognition technology and a computerized voice reads out what’s in front of the camera. The device can also recognize faces, money and other objects.

Founded by the cofounders of MobilEye, an Israeli technology company that develops vision-based advanced driver assistance systems, the first OrCam MyEye device was launched in 2015, with a next generation device OrCam MyEye 2.0 launched in 2017.

ORCAM’S MYEYE DEVICE

In February 2018, the company completed a funding round that valued the company at $1bn, putting it on track for a planned IPO next year on a US exchange. Orcam CEO and cofounder Ziv Avaram told Reuters he expects OrCam to exceed the success of MobilEye and hopes the company will be valued at $1.5bn-2bn when it lists.

The device is currently available in 15 countries and the team has grown to more than 170 people, mostly engineers based at the company’s Jerusalem headquarters. The customer base for the device is also expanding beyond blind or partially sighted to people with dyslexia, or those with reading difficulties.

Priced at $3,500-$4,500, the device is not cheap, but OrCam says it has been costed at the average price of a hearing aid. Nevertheless, reimbursement continues to be an obstacle in most countries, with the majority of users currently having to pay for the device themselves.

“Our current customers pay out of their pocket, but we strongly believe this is something we want to change. It makes no sense. One of the things we found, which is quite remarkable, is for people with low vision there was never a real solution and the legislation, and systems are not yet set up for it,” said Wexler.

“Blind people get a lot of funding but only for personal help to cope with daily difficulties. There is no help for tools that are productivity enablers. The bottom line, though, is if you have a child with low vision, the system is geared toward paying welfare for this child till the end of his life – so it’s a lot of money and a wasted life. Everyone wants to help and make sure the right thing is done, but we need a system that is set up to support that.”

OrCam currently has 10,000 active users and hopes to see more growth over the years, with a planned launch in Japan and China this year. “This is not just a philanthropic effort, it’s a real system and a real business, so kids can start using it now and know they can rely on it for the rest of their lives,” added Wexler. “What we found when we met kids is that you give them a tool like this and they’re so happy and it helps them to be successful. A UK study showed that a child born with low vision has a 25% of ever being employed, which is a terrible statistic. Before we came out in 2013, there was no solution so you can see for kids this type of technology is really important in making a difference to the quality of their life.”

*MIXiii Biomed is Israel’s leading international life science conference and exhibition, taking place on May 15-17 at the David InterContinental Hotel in Tel Aviv. The conference is the largest meeting place for health-care professionals from Israel with international colleagues and partners, and offers a unique opportunity for global participants to learn about the latest innovations and technologies of Israel’s #biomedicalIndustry. The conference will host more than 6,000 industry players, scientists, engineers and investors, including more than a thousand attendees from more than 45 countries. Hundreds of Israeli life-science companies will present and exhibit their products, services and technologies, allowing for hands-on experience. In addition to an #ophthalmology track, the conference this year will also look at trends in the following fields: #digitalHealth, #oncology, #brain health, personalized #diagnostics and #therapeutics, and #nanomedicine, among others.